Let’s assume your current mortgage balance is $279,500, and it will cost $220,500 to build an ADU, after deducting a $14,000 ADU preconstruction grant. This new mortgage must include the refinance of any existing mortgage. You’d be close to the qualifying limit with a $500,000 total mortgage. For example, Los Angeles ZIP code 90062 puts that area median income cap at $68,880 (or $5,740 per month), according to Fannie Mae’s website. The next challenge is the 80% area median income cap. In other words, there needs to be other recently sold comparable properties with ADUs to use as comps. You will need like-for-like comparable sales to justify the new value, according to Lance Siegel, president of HVCC Appraisal Ordering Service.
Fannie allows a mortgage for up to 95% of the estimated completed value on loan amounts of $548,251 to $822,375 in Los Angeles and Orange counties. For example, Fannie Mae’s Homestyle allows a mortgage for up to 97% of the projected appraised value so long as the loan does not exceed $548,250. Things might get tricky when it comes to income and property qualifying for this grant.
